To Jacobs'eyes,bottom line is required reading

JOHN EISENBERG

June 07, 1991|By JOHN EISENBERG

Eli Jacobs says he is considering selling the Orioles because he no longer has enough time to read two or three books a week. He didn't mention the $25 million profit his group stands to make in less than three years of ownership. It probably has crossed his mind.

He says he is thinking about getting out because owning a team is a venture too public and time-consuming. He didn't mention that the upcoming free agencies of Cal Ripken, Glenn Davis, Ben McDonald and Gregg Olson could cost many millions, taking a big whack out of that profit. It probably has crossed his mind.

He implies this is in many ways a matter of the heart, that his agenda is to escape scrutiny and make more time to do as he chooses. While that may be true, let's not forget that he is a money man, his empire built on knowing when to buy and sell, and the first principle among those of that ilk is this:

Never let your heart tell you when to make a move. Your bottom line always tells you when to make a move.

This principle certainly has governed Jacobs' other deals. And his ownership of the Orioles. It probably has a big role in this news, too. Jacobs may have many reasons for considering selling the Orioles, but the best one surely is this: It is a terrific time for him to do it.

He is in position to make a killing, and his profit may not grow much, not with his payroll about to soar ` if he wants to keep the team competitive, that is and baseball's television revenues on the verge of a crash and the market for clubs about to level off or drop along with those television revenues.

Yes, the Orioles' revenues will increase in their new, sky-boxed, premium-seated stadium, but will it be enough to offset the other declines in revenue (and his debt service)? Who knows? Baseball's financial future is cloudy at best, catastrophic at worst.

Meanwhile, here is a sure thing, a chance to cash a fast, fat profit and get out. It makes perfect sense. Why hold out when the climate is so unstable and there's a chance something bad will happen (and when a couple of your other businesses aren't doing so well, either)?

It is just smart business, and Jacobs is, above all, a smart businessman. He has run his team like one, certainly. He never has bought into the insanity an owner needs these days. He has spent to upgrade the farm system, a wise idea, but his team needed lots of short-term help and he just couldn't bring himself to spend the big money.

It wasn't his idea of smart business. If his heart told him to spend more and make the team better, his bottom line told him that a return on such an investment wasn't guaranteed. So the Orioles have the second-lowest payroll in the major leagues. And they're in last place. The bottom line won.

Jacobs would argue that large payrolls do not always translate into wins, and he is correct, as the Yankees and Royals have proved. But that's not the essential point this time. The essential point is small payrolls almost always do translate into losses.

These days, the same teams are consistently down at the end of the payroll scale, along with the Orioles. Which ones? The Mariners, Braves, White Sox, Indians, Expos, Phillies.

When was the last time any of them made the playoffs?

There are exceptions, of course, but the general rule is that, while high-priced teams don't necessarily win, penny-pinching teams almost never do.

The Orioles have pinched pennies and suffered for it. There is no getting around it. It doesn't mean Jacobs is evil. He's just been prudent, which is how he made his money. The lesson may well be that there's no room for fiscal prudence in baseball anymore.

Jacobs hasn't enjoyed being called a tightwad, of course, but maybe it wouldn't happen if the evidence weren't so strong, if the Orioles made just one major move without keeping such an apparent eye on their balance sheet.

Consider their major deals of the Jacobs era. They traded Phil Bradley for Ron Kittle ` a terrible deal ` to avoid paying Bradley, whom they could have used. They traded Mickey Tettleton for Jeff Robinson, creating a hole at catcher and saving almost $1 million. The one major free agent they signed was 39 years old and came cheaply.

Yes, they did trade for Davis and give him $3.275 million for 1991, but now his contract is up after this year, and Jacobs isn't set on re-signing him. In The Washington Post yesterday, a scene was described in which Jacobs, asked if he planned tore-sign Davis, paused 20 seconds before saying, "I'd like to see how Glenn Davis does this year."

That is enoughof a bottom-line approach. Given that Davis recovers from his neck injury, there is no reason not to sign him. It doesn't matter what he does this year. He has a track record. The Orioles need him. They don't have enough hitting otherwise, as they've shown this year. He fills an enormous hole.

If Jacobs thinks the price is too high and lets Davis get away, the bottom line clearly is coming before the team.

It wouldn't be the first time the Orioles have suffered for this approach. Now, Jacobs tells us he is suffering, too. He wants more time for reading, vacations and his other businesses. Baseball is overwhelming him. Fair enough. It's easy to see how it happens,But you can be sure all that would be a lot less important if he weren't staring at such a fat profit.